Dropping demand, heavy taxes affect small & medium businesses: study

PanARMENIAN.Net - The small and medium businesses sector will play a key role in Armenia’s development, a Development Director and Partner with Ameria Group Tigran Jrbashyan said.

Ameria consulting company conducted a research on Armenia’s small and medium-sized enterprises (SMEs). The study includes the country’s macroeconomic description, SMEs’ characteristics, relations with banking systems, necessity of consulting and other professional services, regulation of the sector as well as comparative analysis with other countries.

According to Jrbashyan, the study reveals problems in the SME sector, solutions to be suggested, region-specific issues. The study shows a dramatic decrease in demand caused by demographic problems as well as heavy taxes.

On the positive side, Jrbashyan noted, the issues are not caused by poor financing or technologies. “Southern regions of Armenia are more affected by the dropping demand, with no serious investment projects initiated there as a result,” he stressed.

The study covers 1003 SMEs, with 655 operating in Yerevan, 144 – in Gyumri, 152 – in Vanadzor, 52 – in Dilijan. 74,4% companies operate micro businesses, 20,2% - small businesses, 5,1% - medium businesses.

According to the study, 47,6% SMEs are engaged in trade, 34,4% in services sector, 15,5% - manufacturing, 2,2% - construction, with trade prevailing among micro businesses – 55,2%.

According to Jrbashyan, SMEs cooperation with banks is mostly restricted to credits and transfers.